2025/08/22 | Diego Ciongo & Soledad Castagna
At today's monthly monetary policy meeting, the BCP kept the monetary policy rate at 6.00% for the seventeenth consecutive month, in line with our call and market expectations (according to the BCP’s survey).
According to the statement, the committee reaffirmed its commitment to price stability and will continue to monitor domestic and external developments closely, anticipating their potential implications for inflation, and will take appropriate measures to ensure compliance with the 3.5% target over the monetary policy horizon. Therefore, we estimate that the real ex-ante policy rate remains at 2.5% (using expectations for the monetary policy horizon), compared to the BCP's neutral real interest rate range of 1.3%-2.6%.
Regarding the global context, the BCP highlighted trade tensions have moderated following tariff agreements recently reached by the U.S. government with some countries. The market considers it increasingly likely that policy rate cuts by the Federal Reserve will resume next month. In commodities, oil prices declined since the last meeting.
Our take: We forecast a policy rate of 6.00% for YE25. The policy rate is already at the upper bound of the BCP’s neutral range in real ex-ante terms. Leading indicators suggest positive momentum in economic activity, while inflation expectations for the monetary policy horizon (18-24 months) remain stable. The next monthly monetary policy meeting is scheduled for September 23.
Diego Ciongo
Soledad Castagna